I blogged it last night but I’m showing the Bugatti Veyron again because I can and I want to. Clarkson, you are one lucky bastard to have driven this.
What a thing of beauty. A picture is probably as close as I’ll ever get to one. (sigh)
Not so well known by me, though probably countless others are/were aware – that while Wall Street is held to the Securities and Exchange Commission regulations and oversight designed to curb improper trading, others are not.
Guess who is not held to account for what is essentially insider trading?
Yes, your elected officials can schmooze with lobbyists, talk behind closed doors, have private meetings with industry leaders – and then turn around and sell off their stock just before bad news goes public.
I wasn’t oblivious to the practice, I just thought that it was illegal and there was no one set up in a position to enforce laws on th e matter.
According to that source (above), insider trading is:
- “Violation of a duty (as in the duty of fidelity of an officer to his corporation and its shareholders); or
- Misappropriation of information that belongs to a third person (as in the information about what’s going to appear in a print journal that is ascertained [found out] because the ascertainor is an employee of that journal or of a printing company contracting with that journal).”
And you say “Uh, so what? Isn’t that obvious?” Well, not so fast when it concerns your representative who is really out for himself with that information he gleans as he gets paid by you to do his job…
… applying those two tests to Congress reveals an important legal truth. According to my source: “Congressfolk fit in neither category. They owe no duty of fidelity to anyone (possibly excepting their constituents) and all the information they ascertain is ascertained in pursuit of their Congressional functions with no strings attached.
In other words, since people in Congress don’t have a duty to a corporation and they are getting their insider information in performing their jobs as Congress people, they can use that information without restriction. – Peter Cohan
So while your portfolio tanked like mine, across congress the average returns were well above the average elsewhere.
Senators make significant abnormal returns, some place around 1 percent above the market, 12 percent a year. – Alan Ziobrowski
It’s absolutely incredible, but the Securities and Exchange Act does not apply to members of Congress, congressional staff or even lobbyists. – Craig Holman
Why even bring it up, you might ask. Because in spite of possible unintended consequences, I’d like to suggest this idea that came to me while great deep and profound brain things were going on inside my head:
Upon entry into congress and for a period of two years after leaving congress, all congressmen and congresswomen would surrender their stock portfolios to be administered in a double-blind fashion such that they can only direct their investments in a totally transparent third-party-scrutinized fashion.
Cashing out could only be done after a 2 week waiting period.
Fairly safe to say that Congress isn’t going to vote itself off the money island.
There’s lots of sources of information out there, but do watch out for OpenSecrets.org, which according to the IRS was a funding source for The New Democrat Network.
Here’s a good source: Stephen Bainbridge – Insider Trading by Congressmen
On his blog he also brought up two very interesting ideas – Is Obamacare a Done Deal? and Regulating Away Financial Crises. A third entry concerns risk-taking in business – Regulating Banker Pay. Mainly, that the Fed is interesting in curbing risk-taking behavior in the business sector, which will put the brakes on the flow of money.
(My opinion) What the people who favor more regulation fail to recognize is that a lot of practices have evolved the way they did in order to maximize two things – attractiveness to investors and increased returns. Stifle investment practices and you’ll negatively impact the economy.
Giant wooden dinosaur skeletons – cool.
Making a pinhole camera out of an Altoids can – even cooler. Of course a used condom packet could be made into a pinhole camera with enough black tape, but I like it.
And now they’re transgendering a 9 year old. That’s too young for the age of consent for a life-altering decision. Sorry.
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